Political Climate Holding Back Small U.S. Firms Amid ElectionBy
Record number of respondents cite politics in survey
NFIB’s broader optimism index remains below long-term average
America’s small-business owners are blaming politics more than ever for holding back their expansion plans, a sign that the presidential election is restraining economic growth.
A record 38 percent of owners surveyed by the National Federation of Independent Business cited the political climate as a reason not to expand. The group’s broader Index of Small Business Optimism fell 0.2 point in August to a three-month low of 94.4, below the 42-year average of 98. Respondents indicated increasing difficulty finding qualified workers for a growing number of open positions, with vacancies rising and plans to hire falling.
The survey reinforces other data suggesting that the U.S. economy is failing to fire on all cylinders amid an election campaign that could be exacerbating uncertainty. Business investment has declined for three quarters, while government figures showed hiring cooled in August, even after job openings reached a record.
“A growing number of small-business owners are paralyzed by the political climate. They’re especially reluctant to hire,” NFIB President Juanita Duggan said in a statement. “On the other hand, there’s another group of small-business owners who want to hire, but can’t find qualified workers to fill positions.”
The main optimism index was projected to rise to 94.8, based on the median estimate of analysts surveyed by Bloomberg. The survey was conducted in August and based on 730 responses.